(Adds details of earnings)
SAO PAULO, Nov 4 (Reuters) - Telefonica Brasil SA , Brazil's biggest telecommunications company by revenue, reported a larger-than-expected 16 percent drop in third-quarter net income due to weak sales growth and rising debt-servicing expenses.
The local unit of Spain's Telefonica SA reported a third-quarter profit of 886 million reais ($233 million) in a Wednesday securities filing. The result was worse than an average estimate of 1.017 billion reais in a Reuters survey of analysts.
Net revenue rose 5 percent, about half of consumer inflation in the period, as both fixed-line and mobile sales stagnated due to Brazil's worst recession in 25 years.
Provisions for bad consumer debts jumped 28 percent from a year earlier to 349 million reais, or about 3 percent of sales.
The company kept a tight lid on other operating costs, with personnel and administrative costs rising just 4 percent and commercial expenses rising 5 percent.
Financial expenses jumped 26 percent, however, due to a sharp currency swing and rising interest rates.
Earnings before interest, taxes, depreciation and amortization rose 4 percent to 3.179 billion reais, in line with an average estimate of 3.175 billion reais in the Reuters poll.
Telefonica Brasil reported its earnings from a year ago consolidated with recently acquired broadband provider GVT SA.
$1 = 3.799 Brazilian reais Reporting by Brad Haynes; Editing by James Dalgleish